Renting Your House
What you should know before you rent out your house
Even if you've never considered managing a rental property and tenants, you may at some point find yourself renting your house. Most likely, it will come as a result of being unable to sell that property at a price you think is reasonable, or you're holding it as a nest egg, waiting for the home's value to appreciate. Perhaps you are choosing to rent out your house in order to take advantage of the extra income if you go on extended vacations for half the year. If you're ready to move and your house has not sold, renting could also help you manage mortgage payments.
Tips for renting your home
Whatever reason you have for renting your house, you should enter the experience armed with knowledge of your responsibilities as well as benefits and cautions of renting out your permanent residence.
Your responsibilities as a landlord
If you've only been a homeowner or renter but never a landlord, there are several responsibilities you'll need to be aware of before you rent out your house. As a landlord, you'll have to be ready to respond to phone calls from tenants when things aren't working properly at your property. You'll also have to:
- Perform routine maintenance yourself, or hire someone who can.
- Pay all taxes on the rental income.
- Follow all local rules and regulations governing landlords, including fair housing guidelines. These may vary by state, so you should look into the specifics for your area. However, in general this could mean:
- Maintaining the premises by changing or fixing locks and keys, keeping it safe and clean, and providing receptacles for garbage removal.
- Providing adequate weatherproofing and insulation.
- Making heat, water and gas or electric utilities available, either through payment by the landlord, payment as part of rent, or properly functioning systems to be paid for by the tenant.
- Following all conditions set forth in the rental agreement
- Respecting the tenant's property and privacy
The perks of renting your house
There are also some perks to being a landlord, including tax benefits. You may be able to deduct most of the out-of-pocket expenses involved in owning and managing the property, and you could also benefit from long-term appreciation on the property. Allowable tax deductions may include:
- Repair costs
- Mortgage interest on the property
- Insurance on the property
- Broker fees incurred
- Costs associated with finding tenants, such as advertising fees
How to find responsible tenants
Getting the word out that you are renting your house ideally involves both formal and informal channels. The more avenues through which you advertise the opening, the better chance you'll have of finding the right tenant quickly. Here are some possible marketing locations to consider:
- Newspaper ads
- Online listings
- Notices pinned in public places, like coffeehouses and libraries frequented by potential renters
- Word-of-mouth through friends, family members and colleagues
- Social media alerts to your social and professional connections
- Working with a real estate agent
Aesthetically preparing to rent out your house
Tidying up the property to show to renters is not unlike preparing your house for potential homebuyers when staging a home. The only difference is that renters generally have lower expectations since they typically expect to stay for a shorter time than buyers. Also, renters generally won't have the same emotional and financial investment in the property as an owner would. But, just like buyers, they know there's an open market with many competing rental properties available, and your house must stack up favorably before renters will sign a lease.
Consider renting your house if you cannot sell for your asking price
When you're ready to move, you're most likely counting on income from the sale of your current home to cover the cost of your mortgage as well as your new down payment. Consider the option to rent out your house until you can find a buyer in order to earn a little extra income. Talk to a Citizens Bank home loan Originator at 1-888-514-2300 to discuss managing multiple mortgages. Ask friends or family who are landlords for tips for renting your home, or consult a local real estate agent for more detailed information.